Does 1-800-FLOWERS.COM (NASDAQ:FLWS) Have A Healthy Balance Sheet?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. As with many other companies 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) makes use of debt. But is this debt a concern to shareholders?

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is 1-800-FLOWERS.COM's Net Debt?

You can click the graphic below for the historical numbers, but it shows that 1-800-FLOWERS.COM had US$157.5m of debt in December 2024, down from US$191.7m, one year before. But on the other hand it also has US$247.2m in cash, leading to a US$89.7m net cash position.

A Look At 1-800-FLOWERS.COM's Liabilities

According to the last reported balance sheet, 1-800-FLOWERS.COM had liabilities of US$325.6m due within 12 months, and liabilities of US$317.0m due beyond 12 months. On the other hand, it had cash of US$247.2m and US$61.4m worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$334.1m.

This deficit is considerable relative to its market capitalization of US$356.2m, so it does suggest shareholders should keep an eye on 1-800-FLOWERS.COM's use of debt. Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution. While it does have liabilities worth noting, 1-800-FLOWERS.COM also has more cash than debt, so we're pretty confident it can manage its debt safely. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine 1-800-FLOWERS.COM's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts .

View our latest analysis for 1-800-FLOWERS.COM

Over 12 months, 1-800-FLOWERS.COM made a loss at the EBIT level, and saw its revenue drop to US$1.8b, which is a fall of 7.9%. We would much prefer see growth.

So How Risky Is 1-800-FLOWERS.COM?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And the fact is that over the last twelve months 1-800-FLOWERS.COM lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through US$10m of cash and made a loss of US$7.6m. But the saving grace is the US$89.7m on the balance sheet. That means it could keep spending at its current rate for more than two years. Summing up, we're a little skeptical of this one, as it seems fairly risky in the absence of free cashflow. When we look at a riskier company, we like to check how their profits (or losses) are trending over time. Today, we're providing readers this interactive graph showing how 1-800-FLOWERS.COM's profit, revenue, and operating cashflow have changed over the last few years .

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.